Microsoft Corp. (MSFT) delivered a rather mild surprise when it announced that it had recruited Steven Spielberg to produce an upcoming exclusive TV show for the Xbox One based on the Halo series in which future humans battle alien invaders.

But over the last couple weeks, Microsoft has delivered a far bigger surprise revealing that it is looking to become perhaps the biggest maker of video game television and movies in the industry. Comments Microsoft Studios CVP Phil Spencer at the Tokyo Game Show, "[The joint Microsoft/Spielberg team has] literally hundreds of ideas that they are incubating right now. We will have some new announcement for TV shows coming pretty soon."

According to Reuters, Microsoft refers to these other projects as "Nancy projects" a title which pays homage to CBS Corp.'s (CBS) former Television Studios President Nancy Tellem whom Microsoft hired a year ago as head of entertainment and digital media.

But of all Microsoft “experiments”, its gaming business has been by far the most profitable, particularly as it has expanded its game publishing efforts via its Microsoft Studios Holdings. And increasing the software/media efforts related to its gaming business helps to offset and make worthwhile the money losing console business.

And Microsoft's TV efforts could go a long ways to differentiating its Xbox console. In addition to its Halo and unannounced other game-based TV series which ooze hardcore nerd/gamer appeal, Microsoft will also cater to the mainstream partner with the National Football League and other partners to offer exclusive clips via the Xbox One and its online backbone, Xbox Live.

The consoles sales goal is by no means a done deal. Piper Jaffray Comp. analyst Michael Olson predicts that the Sony PlayStation 4 (PS4) and Xbox One will each sell about 3 million units -- a far cry from the booming sales of some past consoles. Mobile gaming has taken its toll on traditional console gaming. Microsoft arguably has the more compelling console in terms of interface and exclusive titles, but has been mired in controversy.

As for the game sales goal, video game sales for consoles now only account for 33 percent of sales -- according to the NPD Group -- due to mobile games, social network games, and other niches stealing away some of traditional gaming's business. Still that number is slightly misleading, as it doesn't factor in the digital downloads market (part of the remaining 67 percent), of which the Xbox has a substantial stake.

But speaking of digital downloads, Microsoft's efforts to push customers into its Xbox Live Gold model by locking them out of features on their console (DVR, etc.) if they stick with the free Live Silver level members is alienating some potential buyers. Microsoft's approach seems pretty counterintuitive in that it actually allows non-paying users to play online games (which costs Microsoft money in serving fees) for free, which Sony only allows paying customers to do. But Sony does not lock non-paying PlayStation Network customers out of features on their console; features that essentially have already been paid for with the cost of the console.

With respect to its TV push, one critical thing not yet made clear by Microsoft is whether Live Silver subscribers will be locked out of the free Halo show and other television content on the console. It's very possible that they may be, given Microsoft's announcement of the channel guide and DVR locking.

In short, there's a lot of unknowns as the Xbox One approaches, but Microsoft is certainly not shying from taking a unique and ambitious direction with its television ambitions.

will this thing flop? there are enough "patriotic" americans (fox viewers, other people with low IQs) left to buy this thing, even if it comes with an NSA camera/microphone that's always on.but what about the rest of the world? how many canadians, japanese, and europeans will buy this thing. especially given ongoing revelations about the extent of MS' involvement in data mining and sharing with the NSA. when you also consider that the hardware is still less powerful than the PS4's (unlike what the article suggests) and the higher price tag, and i don't see why anyone in their right mind would want this thing.

I think you give the rest of the world too much credit. Just because the US takes the cake on stupid doesn't mean we aren't far behind. Most people here in europe won't even be able to put 2 and 2 together on a voice activated machine and it recording everything you say to analyze and pick out the few words it wants.

The only thing that can be said for certain is that it'll fail in japan. Which is because the japanese are xenophobes every chance they get, with sony being a japanese company it's a given they will win there.

Even if it does flop that'll be a relative term. They'll sell less then the PS4, but they will still sell millions. Enough to justify an next xbox, anyway.

They'll end up selling more then the PS4 in the US, less in europe, and not even reaching a million in japan. About the same as the previous generation. Which isn't a big suprise when you think about what both consoles actually offer more then the previous generations. A faster machine, but that's about it. So business as usual i guess.

and i'm sure these people you speak of didn't want your government to spy on its citizens in a worse way than the soviet union or east germany ever did. something about not trading freedom for security... what was it again?

You think it was about taxes? Really? I mean taxes did play a part in it, but there was a lot more that went into it. One of the biggest issues was that you could only purchase (with rare exception) goods imported from europe, as making things out of materials gathered from America was illegal. This caused huge prices on things which made it impossible to gather any wealth at all... and a great many of the people came in order to start life over and attempt to build some sort of wealth which could not be had in England. When they started adding punitive taxes it was just insult to injury, but things were already headed towards revolution long before they were implemented.

I think it'd be fairly easy to monitor traffic to see if the xbox ever sends video traffic across the network at all. It's not that easy to hide a video feed's worth of traffic on a device that, when in standby, should be sending hundreds of kilobytes a day, tops.

So, I guess you must not have a cell phone. After all, if you think Bill Gates wants to watch you masturbate on your sofa, you must obviously be too afraid to carry a device with a mic, camera, and location tracking with you everywhere you go.

Was any of the Halo TV shows/Movies any good? i have seen the movie on Netflix but don't want to waste a couple hours of my life watching a video game movie. That and i have never been into the halo scene(there has always ben better games out on PC)

Halo: Forward onto Dawn was actually rather decent considering what it was.It was easily the best Sci-Fi show on air at the time, that doesn't say allot, really the only Sci-Fi shows on was: Falling Skies and Defiance (Police Drama dressed up in Sci-Fi) and now with a little dash of Under the Dome, so the competition isn't exactly aggressive.

The current state of Sci-Fi TV is actually rather depressing considering what we got in the past with the likes of StarGate, Star-Trek, Firefly, V, Battlestar Galactica and such.

Halo: Legends though, was a boring piece of molasses, being a stitched up bunch of short films.